"We remain committed to providing trusted and iconic brands for our loyal consumers, and this commitment has resulted in our decision ... to destroy old and out-of-date product in the U.S.," said the company's CEO, Dan Dearie, in a press release.

The company is also offering up to $40 million AUS in discounts and rebates to its distributors to ensure it can get its excess capacity out to the thirsty public as quickly as possible.

"It's clear this is a [supply] problem that has been building up beneath the surface for quite some time -- several years by the looks of things," said an Australian analyst who follows the winemaker.

Inside luxury wine cellars

Treasury Wine Estates' largest market is in the U.S.

The company reported global sales of $1.6 billion AUS in 2012 and produced nearly 32 million cases-worth of wine during that year.